Cloudflare Q1 revenue beats estimates, announces workforce reduction

Cloudflare

07/05/2026 21:38

Overview

Connectivity cloud firm's Q1 revenue rose 34% yr/yr, beating analyst expectations

Adjusted EPS for Q1 beat analyst expectations

Company to cut about 1,100 jobs as part of AI-first operating model shift

Outlook

Cloudflare sees Q2 revenue of $664 mln to $665 mln

Company expects full-year 2026 revenue of $2.805 bln to $2.813 bln

Cloudflare expects most restructuring charges from workforce reduction in Q2 and Q3 2026

Result Drivers

AI DEMAND - Co said AI is driving a fundamental re-platforming of the Internet and is the biggest tailwind in its history

AI-FIRST OPERATING MODEL - Co said it is embracing an agentic AI-first operating model to increase speed and innovation

WORKFORCE REDUCTION - Co announced plan to cut about 1,100 jobs as part of its AI-first operating model shift

Company press release: ID:nBw74rjQFa

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Beat
$639.76 mln
$621.87 mln (29 Analysts)
Q1 Adjusted EPS
Beat
$0.25
$0.23 (29 Analysts)
Q1 EPS
-$0.07
Q1 Net Income
-$22.93 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 25 "strong buy" or "buy", 9 "hold" and 2 "sell" or "strong sell"

The average consensus recommendation for the it services & consulting peer group is "buy"

Wall Street's median 12-month price target for Cloudflare Inc is $231.00, about 7.1% below its May 6 closing price of $248.59

The stock recently traded at 198 times the next 12-month earnings vs. a P/E of 147 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)